Last week, Baxalta rejected a $30 billion buyout bid from Shire, pointing to its youth, its standalone prospects and a portfolio that just wouldn’t jibe with the Irish pharma’s. On Monday, its CEO hammered those points home once again for investors–and stressed that Shire’s proposal, as it stands, is “wholly inadequate.”
Baxalta’s leaders made the “correct decision” not to engage with the Dublin drugmaker, skipper Ludwig Hantson insisted, noting that the $45.23-per-share offer “wasn’t close” to where it should be if Shire wants Baxalta to come to the table.
“In some respects, the nature of Shire’s interest in Baxalta is puzzling. Is it trying to opportunistically acquire our attractive hemophilia, immunology and growing oncology platforms without true synergies? We have an attractive set of franchises and it would be a shame to hand it over for a lowball valuation,” Hantson said on a call with shareholders.
Sure, Shire could bring along tax advantages for the Illinois drugmaker, thanks to its Irish address. But that’s where the savings would end, Baxalta believes. Though the two companies both focus on rare diseases, there’s little overlap, with Baxalta’s focus mainly on plasma. Combining plasma with other biopharma businesses won’t make easy cost cuts, Hantson contends.
“An acquirer like Shire isn’t just going to find easy savings from a combination with dissimilar assets,” he said.
When it comes to Baxalta’s standalone prospects, though, Hantson’s outlook is much rosier. The company is aiming to launch 20 new products by 2020, which should help it generate more than $2.5 billion in risk-adjusted sales. Its infrastructure and manufacturing “will provide an excellent platform to grow value,” too, he said.
Some analysts, though, have applauded Shire’s decision to go after Baxalta–and quickly. Cowen & Co. analyst Ken Cacciatore, for one, views the proposal–initially brought to Baxalta just 9 days after it spun off from parent company Baxter–as “value-creating and appropriately aggressive,” he wrote in a Monday note to clients.
By Carly Helfand